If Parramatta end up funding Watmough's contract, it will leave the club a record $11 million-plus in the red for the 2016 season.

The only encouraging news for the Eels is that the NRL says the former Manly forward's payout will not be included in the 2017 and 2018 salary caps, despite QBE's ruling, leaving them free to pursue marquee players.

A NRL spokesman said QBE's decision did not override the league's ruling in May that Watmough's injury was career-ending.

"If we determine a player has suffered a career-ending injury, we can exclude that player's payments from the salary cap."

The Watmough insurance claim is believed to have been the first potential seven-figure payout for a player's career-ending injury since QBE became the insurer for the top 25 players at each club in 2014 after the Alex McKinnon tragedy.